Correlation Between Intact Financial and GoldMining

Can any of the company-specific risk be diversified away by investing in both Intact Financial and GoldMining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Intact Financial and GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intact Financial and GoldMining, you can compare the effects of market volatilities on Intact Financial and GoldMining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Intact Financial with a short position of GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and GoldMining.

Diversification Opportunities for Intact Financial and GoldMining

-0.66

Correlation Coefficient

Intact Financial  GoldMining

Excellent diversification

The 3 months correlation between Intact and GoldMining is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and Intact Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Intact Financial are associated (or correlated) with GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Intact Financial i.e., Intact Financial and GoldMining go up and down completely randomly.

Pair Corralation between Intact Financial and GoldMining

Assuming the 90 days trading horizon Intact Financial is expected to under-perform the GoldMining. But the stock apears to be less risky and, when comparing its historical volatility, Intact Financial is 1.51 times less risky than GoldMining. The stock trades about -0.1 of its potential returns per unit of risk. The GoldMining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  108.00  in GoldMining on May 20, 2025 and sell it today you would earn a total of  4.00  from holding GoldMining or generate 3.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Intact Financial  vs.  GoldMining

Intact Financial

Risk-Adjusted Performance

Weakest

Over the last 90 days Intact Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

GoldMining

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in GoldMining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, GoldMining is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Intact Financial and GoldMining

The main advantage of trading using opposite Intact Financial and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intact Financial position performs unexpectedly, GoldMining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GoldMining will offset losses from the drop in GoldMining's long position.

The idea behind Intact Financial and GoldMining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.